Q3 2024 GE Healthcare Technologies Inc Earnings Call Transcript
Key Points
- GE HealthCare Technologies Inc (GEHC) reported strong growth in backlog, primarily driven by services, which supports recurring revenue with high predictability and accretive margins.
- The company delivered a strong adjusted EBIT margin of 16.3%, up 90 basis points year over year, and raised the low end of its full-year adjusted EBIT margin and adjusted EPS guidance ranges.
- GEHC's pharmaceutical diagnostics segment reported 7% year-over-year organic growth, driven by healthy procedure volumes and a robust EBIT margin of approximately 31%.
- The company secured FDA clearance for a new software tool to standardize and automate radiation dosage measurement during theranostics treatment, enhancing patient access to precision medicine.
- GEHC is investing in AI and cloud-based solutions, such as CareIntellect, to optimize care delivery and reduce operational inefficiencies, which could drive future recurring revenue.
- Organic revenue growth was only 1% for the third quarter, impacted by market headwinds in China, which reduced total company sales growth by approximately 400 basis points.
- China's market recovery has been slow, with stimulus funding coordination taking longer than expected, leading to delayed purchasing and impacting overall growth in the region.
- The advanced visualization solutions segment experienced a 190 basis point decrease in EBIT margin year over year, driven by unfavorable mix despite cost productivity improvements.
- GEHC expects full-year 2024 organic revenue growth to trend towards the lower end of its 1% to 2% guidance due to continued softness in the China market.
- The company faces challenges in expanding its PET system infrastructure to support the anticipated growth from new products like Flyrcado, which could delay revenue ramp-up.
Thank you for standing by and welcome to GE HealthCare's third quarter 2024 earnings conference call. (Operator Instructions) I would now like to turn the call over to Carolynne Borders with Investor Relations. Please go ahead.
Thanks, operator. Good morning, and welcome to GE HealthCare's third quarter 2024 earnings call. I'm joined by our President and CEO, Peter Arduini; and Vice President and CFO, Jay Saccaro.
Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides available on our website.
During this call, we'll make forward-looking statements about our performance. These statements are based on how we see things today. As described in our SEC filings, actual results may differ materially due to risks and uncertainties.
With that, I'll hand the call over to Peter.
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